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Mortgage rates drifted down for the third consecutive week, following Treasury yields lower as investors sought safe-haven assets and began assessing the market implications of the Democratic Party’s overwhelming victories in the midterm elections.
The average 30-year fixed-rate mortgage was 7.18% this week through Wednesday down from 7.24% a week earlier
The ongoing rout in technology stocks helped push the 10-year Treasury yield, which mortgage rates closely track, lower this week as investors fled into a traditional safe-haven asset. Yields dropped again on Wednesday, alongside oil prices, as investors grew hopeful that the Democrats’ strong midterm showing may usher in a faster resolution to the Iran War, new restrictions on data center spending and development, and lower inflation.
A number of factors, from oil prices to AI spending to US fiscal policy, have helped push mortgage rates above 7% this year. It’s unclear if, or when, those pressures will ease.
“Whether the forces keeping bond yields elevated — government deficits, geopolitical impacts on prices, and corporate borrowing to fund AI spending — could sustainably fade remains an open question,” Kara Ng, senior economist at Zillow, said in a statement. The listings giant sees mortgage rates staying above 7% for the rest of this year and through mid-2027.
There are few signs that slightly lower rates are bringing buyers off the sidelines. Mortgage applications for home purchases declined 2% in the week through Friday from a week earlier while refinancing applications were nearly flat
“Prospective borrowers may be holding off decisions until rates and economic and political conditions settle,” MBA president and CEO Bob Broeksmit said in a statement.
Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages, and home insurance.
